Aveng not yet deregistering

FOCUS: A SUSTAINABLE CAPITAL STRUCTURE

JSE-listed construction and engineering group Aveng reports it is unlikely the group will deregister from the Johannesburg Stock Exchange (JSE) in the short term. However, Aveng chief executive Sean Flanagan said they “will revisit that over time” as its order book presence outside SA changes from what it is in the country.

Flanagan said Aveng’s work in hand had grown 41% to R26.8 billion at end-June from R19 billion at the end of the previous financial year.

He added that 77% of the current work in hand is in McConnell Dowell, Australian subsidiary, and 82% is outside SA.

Flanagan said Aveng anticipates that McConnell Dowell will be able to announce Au$1 billion (about R11.3 billion) of new work between now and the end of December, while fellow subsidiary Moolmans will announce several billion rand in new work.

“We will update the market as those contracts fall into place,” he said.

Flanagan added that cash at end-June of R1.3 billion is predominantly in McConnell Dowell, where it is needed for working capital requirements and to support their covenants and bonding requirements.

McConnell Dowell is a specialist infrastructure contractor offering engineering and construction solutions to the infrastructure, building and resource sectors across Australia, New Zealand and the Pacific and Southeast Asia.

McConnell Dowell and open-pit mining business Moolmans are Aveng’s core businesses following the restructuring of the group in 2017, which among other disposals, led to the sale of its construction and engineering South Africa and rest of Africa business, including Grinaker-LTA.